The political deal that allowed Virginia to expand its Medicaid program could be falling apart over a promised work requirement less than six weeks before voters decide control of the General Assembly.
While expansion of Medicaid is not imperiled, Republican legislative leaders said Gov. Ralph Northam, a Democrat, is breaking faith with the political bargain they made with him last year by telling President Donald Trump’s administration that Virginia’s commitment to the work requirement depends on the federal government paying for services to help people find jobs.
Virginia Secretary of Health and Human Resources Dan Carey told the federal Centers for Medicare and Medicaid Services on Tuesday, “Without the full federal funding for the employment supports, we would be unable to commit to move forward with implementation of the TEEOP work and community engagement requirement at this time.”
Carey has estimated that it would cost the state more than $50 million a year to carry out the program by itself and declined to say whether Northam would include the funding in the two-year budget he will propose in December.
Republican legislators say his cost estimate is far too high and ignores a fiscal analysis done last year by the Joint Legislative Audit and Review Commission — the assembly’s watchdog agency — that concluded Virginia could use money from existing federally supported workforce development programs to help pay for the additional services.
The Training, Education, Employment Opportunity Program, known as TEEOP, was part of a compromise that House Republican leaders reached with Northam last year in return for supporting Medicaid expansion after blocking it for five years.
“This is breaking the deal on what we had agreed to do,” said House Appropriations Chairman Chris Jones, R-Suffolk, the main architect of the budget agreement. “It was never predicated that we have federal funding for that to happen.”
Senate Finance Co-Chairman Emmett Hanger, R-Augusta, who guided the budget deal through a closely divided Senate, said the General Assembly will find money to pay for work support services that are critical to helping people get jobs without jeopardizing their health care coverage under Medicaid.
“We have a commitment and we’re going to honor that commitment, whether we get the federal dollars or not,” Hanger said Thursday.
“This really is the wrong signal to send to the people who are coming into the program, and to those of us who worked to put the pieces on the table,” he said.
House Speaker Kirk Cox, R-Colonial Heights, worked personally with Northam on a compromise last year that included a state commitment to seek federal approval of a requirement that Medicaid recipients under the existing and expanded program find work, seek education or training, or engage in community services.
“I get the feeling the administration is playing games,” Cox said in a statement on Thursday. “We’re not going to let those games cost people health care coverage.”
“The administration knows what the legislature intends for it to do,” he said. “They can either fix it themselves, or we will fix it for them come January.”
Northam spokeswoman Alena Yarmosky said the budget language approved last year “directs the state to negotiate with the federal government” on a waiver of Medicaid rules to allow the work requirement.
“That is what we continue to do,” Yarmosky said. “We encourage Speaker Cox and Chairman Jones to work with their Republican counterparts in the Trump administration in securing a good deal for Virginia.”
Virginia policymakers tried to fashion a work requirement that wouldn’t punish people by dropping them from the program if they can’t find jobs. Federal judges have blocked Medicaid work requirements adopted by three states — Kentucky, Arkansas and New Hampshire — for doing just that. Indiana is implementing a work requirement but hasn’t begun to enforce it.
The state already has enrolled more than 314,000 Virginians in Medicaid under expanded eligibility requirements in the Affordable Care Act, but Carey estimates that as many as 14,000 people in the program could lose coverage if required to meet the proposed work rules without services to help them do it.
Those services could include treatment for mental health or substance use disorders, as well as education, training, job coaching, housing and other supports to enable them to get jobs. Without federal money to help pay for those services, the state plan “would leave Medicaid beneficiaries without the support they need to obtain employment,” he said.
Carey, a former cardiologist and hospital administrator, told the assembly money committees almost two weeks ago that the Trump administration would not pay for the state’s proposed work support services but promised to continue to fight for federal funding.
His letter to CMS Administrator Seema Verma fulfills that pledge, but he told her, “Without federal funding for employment supports, we are concerned that implementation of TEEOP will cause tens of thousands of Virginians to lose their health coverage.”
Republican budget leaders said the work rules never depended on federal funding because it would be in the state’s best interests to give people “a hand up” so they can qualify for jobs.
“We need to do this no matter who pays for it,” Hanger said. “It’s just good policy.”
The dispute arises as all 140 members of the General Assembly face elections that will determine partisan control of both the House of Delegates and Senate, both of which the Republicans currently govern with slight majorities.
“I’m not surprised by their position, given that it’s an election year,” Jones said, “but I’m disappointed with the administration’s approach.”